Commenting on the announcement that RBS chief executive Stephen Hester has been awarded a £1million bonus by the taxpayer owned bank, the SNP said that UK Government rhetoric over ‘moral capitalism’ and promises to curb executive pay were worthless.

SNP Business and Enterprise spokesperson Mike Weir MP challenged the UK Government to show there is substance behind recent rhetoric on ‘moral capitalism’ by seeking justice for Farepak savers.

Mr Weir has called on the UK Government to step-in and speed up the compensation process for Farepak families after liquidators confirmed in a letter that 207 agents and customers of the Christmas saving scheme have died since the collapse five years ago.

Farepak collapsed in October 2006 owing £37m to more than 119,000 savers (20,000 customers in Scotland). More than five years later, savers are likely to recover just 5p in the pound, while the final bill for the administrators and their legal advisers has already exceeded £8 million.

Mr Weir said:

“Moral capitalism has been the Prime Ministers buzz-word over recent weeks, but his rhetoric has not been matched by action on executive pay.

“After talking tough, David Cameron has done nothing. There is now a question over whether Tory and LibDem Ministers are actually unable or unwilling to curb these bonuses. At a time when concerns persist over bank lending to support businesses, people will be outraged that such amounts of money are going on bonuses for senior executives.

“Executives have to recognise how unpalatable people find the level of bonuses being made. They have to realise how toxic this issue is in the real world.

“I have already said that as we see many people concerned about job security or struggling to balance household budgets, executives should not be considering a bonus bonanza.

“But moral capitalism should not just be about bankers’ bonuses but about helping ordinary people who have been let down by the system and the UK Government should demonstrate this by demanding justice for the victims of the Farepak collapse.

“It is now five years since the company collapsed, yet thousands of ordinary savers, more than 200 of which have subsequently died, have received absolutely nothing whilst the liquidators have pocketed fees in excess of £8million.

“Savers are likely to recover just 5p in the pound, while the final bill for the administrators and their legal advisers has already exceeded £8 million.

“Had they been savers in a bank their savings would have been guaranteed, but because they were savers in Farepak they got absolutely no protection and ended up as ordinary creditors in a liquidation.
“Neither the previous Labour nor present Coalition Government have done anything to help them.

“If there is really any substance behind the rhetoric of moral capitalism then Coalition Ministers must now exert pressure to get justice for Farepak savers, otherwise this will simply be another in a long line of empty gestures.”